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A quick guide to PPC conversion types & values

We know that a conversion refers to an action you want a user to take – e.g. a purchase, email subscription, or a call-back etc. But conversions in paid media come in different variations and forms. Over time, as pay-per-click (PPC) marketing has and continues to evolve – the term has become more complex.  

In this post, we are going to look at different ways you can define a conversion depending on your PPC campaign. 

How have conversions changed?

Instead of just tracking one conversion – now as digital marketers, we tend to focus on multiple actions that we want users to complete. These are what we call ‘micro-conversions’. They are essentially a way of measuring whether our results are aligned with our PPC audience. 

A complete purchase is often the ultimate goal when managing a paid campaign. However – you will benefit highly from measuring micro-conversions such as email subscriptions and phone calls as well.  

This is a natural change as the digital marketing ecosystem has developed. When paid search was a new channel – it was easier to measure traffic because it was coming from the same place (search engines and websites – on a desktop). 

Now, traffic might come from tablets, phones, apps, social media etc. What does this mean for digital marketers? We have to figure out which focus points will provide the best brand growth for us in terms of our PPC and business goals.

Conversion types by goals

A conversion goal or objective will typically fall into one of the following categories: 

Lead Generation 

When you hear the term “lead generation” it means that the primary conversion goal for these efforts is to drive (or generate) a lead. This might be in the form of a phone call, email or another similar action that is an indication of a user having an interest in your company, product, or service.

Nowadays, you can accomplish this without a user having to even visit your site – due to new ad formats and platforms. For example, if your goal is to increase leads – then you can choose your Campaign Objectives and select Lead Generation on Facebook.

Although leads don’t always mean conversions – they are a key part of the process. That is why lead generation is generally considered a micro-conversion. Ultimately, you are getting a lead with the aim of selling them something later down the line. The next steps may be a phone call, an email follow-up or retargeting.  

Purchase Conversions 

You are likely to have heard this in terms of eCommerce. It is exactly what it sounds like – a user has paid for something. Often, accounts will also consider steps such as ‘Add to Cart’. These micro-conversions can help to work out the overall value of a PPC campaign. 

Determining the value 

Before digital marketing platforms developed – there was only one single conversion tag that you would place on a site. This would only be fired when the action (purchase) took place.

Now that platforms have evolved – we can monitor an entire user journey, rather than one conversion. Measurement pixels can track all user movement on different web pages of a site. With this, came the ability for advertisers to specify which actions or URL’s mean a conversion has taken place.  

With a deeper view of user actions – tactics such as retargeting became more powerful because ads could be placed based on specific user actions on a site. How much a conversion is worth will change depending on the purpose of a campaign, for example: 

Lead Generation Conversion Value 

We know that a lead doesn’t necessarily mean a sale. A lead conversion may also miss out information to determine its overall value. This can be problematic if none of your leads are turning into customers. Or, if you are not getting any new leads – the cost per lead wouldn’t matter because there is no profit. 

Lead generation requires a balance between paying the right amount for a lead, depending on how likely a sale is. So, how would you work out your likely ROI (return on investment)? 

We recommend using a reputable CRM (customer relationship management) platform that can pull in the right data to reflect where a user came from and how likely a sale is. A good example is HubSpot.

HubSpot Lead Generation Guide
Hubspot Lead Generation Guide

The tool can help you to measure how much a lead is worth to your business. The answer will determine how much you should be paying per lead. So, you are working out the ideal cost per lead, based on the average amount of sales. 

Purchase Conversion Value 

A PPC ad is often the first point of discovery between users and a brand. Some users will straight away purchase – but some will require a bit more work. 

In this case, most digital marketers will opt for a retargeting ad to lead them further down the sales funnel until they close a sale. These are the ads that will typically get the ‘credit’ for the purchase.  

Other things to consider : 

  • How much are you spending on top of the funnel and remarketing ads? 
  • If you turn off top of the funnel ads, then you will have less possible users to convert. 
  • What is the lifetime value of a customer? (are you selling a one-off product or a subscription/renewable product?)  

Conversions with No Attributable Source 

We have access to more data than ever – but that doesn’t mean that each aspect of digital marketing is entirely measurable. Things like seasonality, competitors and other changes are also ever-changing factors when it comes to conversions.  

So, what about conversions you cannot attribute? We need to consider all channels and PPC efforts combined when it comes to measuring your website conversions – such as Facebook and YouTube Ads. Things like brand awareness are also key to driving more conversions – although they might not appear to have a direct impact. 

If you have any questions or want to speak to a member of our PPC London agency – we’re only a call away.